By Tim Pennington
Enquirer contributor

Pat Horst's hands are so full running the printing company she owns that she never had time to learn her retirement options, let alone plan for it.

Patricia Horst is the owner of Accuforms Plus, Inc., as well as the co-chairman of the Cincinnati chapter of the American Association of Individual Investors. (Meggan Booker photo)

Several years ago she decided to get serious about her financial future, but she didn't know where to begin.

"When it comes to investing and putting money away, it can get so confusing with what is out there," said Horst, a Finneytown resident who runs a company that prints business forms.

"I've heard that people spend more time planning their vacation than they do their retirement," she said. "But, then again, a vacation is a lot more fun."

Horst eventually attended a few local seminars and read up on the latest personal investment news, but she was not alone in her search for information.

According to a recent Roper Poll done for the American Institute for Certified Public Accountants, Americans have a declining level of financial literacy, and most lack a basic understanding of how to prepare for their short-term and long-term financial needs.

The poll of more than 1,000 people found:

• Nearly half said they were unfamiliar with the benefits of a 401(k) plan, such as pre-tax set-asides.

• Sixty-one percent were unfamiliar with the concept of income replacement (retirement funds or other money needed to replace a current salary).

• One-quarter said they would file for bankruptcy if faced with an unmanageable financial emergency.

Take a team approach

The survey does not surprise those in the financial industry. They say most people think saving for retirement is a complex issue that is over their heads and hard to comprehend.

Nick Floyd-Scott, a CPA who runs an accounting firm in Westwood, said most of his new clients have limited personal investment knowledge.

"Investing and financial planning can be a complicated matter," said Floyd-Scott, president of the Cincinnati chapter of the Ohio Society of CPAs. "Most people know the basic ins and outs of what it all means, but putting it all together and getting a plan in place that best suits them is another issue."

Based on the accounting institute survey, the profession has pledged to help Americans become more financially astute by launching a program called "360 Degrees of Financial Literacy," a multifaceted education program designed for everyone from school-age children to retirees.

Several Cincinnati CPA firms take part in a program for children called "Accounting For Kids" that teaches basic financial principles to schoolchildren, but there are limited options for adults to gather such information.

In fact, Floyd-Scott says most CPAs cannot handle a client's financial-planning needs by themselves, instead relying on outside experts. He estimates that only 10 percent of the roughly 3,000 CPAs in Greater Cincinnati are certified financial planners.

"A CPA can be a huge asset to an individual who needs financial planning help, but it should be a team approach with a broker or a banker," he said. "No single person knows it all."

Half have no plan

James Volz, a CPA who runs a firm in Blue Ash, is one of the few accountants in Greater Cincinnati who also is capable of performing investment activities as a member of the Society of Registered Securities Professionals.

ONLINE

Some online resources for financial planning guidance: • www.motleyfool.com • www.brookestephens.com • www.aaii.org (the American Association of Individual Investors) • www.moneypaper.com

He said about half his new clients have no plan for financial security.

"Some think the government will take care of them with Social Security, and others think something magical will happen down the road that will protect them," Volz said.

"Well, it doesn't happen that way. The most important thing to do is find someone you can trust such as a CPA or a broker to work with. They have to feel comfortable with these individuals."

Or a person can do what Horst did and join a group such as the Cincinnati chapter of the American Association of Individual Investors. The local group meets monthly from September through April and invites guest speakers to talk about financial issues. It also has roundtable discussions among themselves to discuss the latest personal investment news and trends.

"I found the group to be a great jumping-off place for someone who has little or no financial planning experience," Horst said.

"It's not to say that investing for your retirement is a 'do-it-yourselfer,' but it helps to know what is out there and what the experts are saying," she said.

"When you turn your money over to the experts, you better know what they are talking about."

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E-mail timpennington@fuse.net